One of the most costly types of value added tax fraud, known as 'missing trader fraud', is increasing, posing new problems for Revenue & Customs, which had succeeded in reducing it by 30 per cent between 2001-02 and 2004-05.

Customs yesterday an-nounced new measures to tackle the fraud, which cost the Exchequer between £1.1bn and £1.9bn in 2004-05.